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The main aim of the study is to provide an index for the Islamic banking industry through which the performance of the Islamic banks can be gauged on the maq¯as. id al-Shar¯ı‘ah. Accordingly, we suggest an index for the Islamic banking industry based on the maq¯as. id al-Shar¯ı‘ah through which the Islamic banks’ performance can be appraised from the maq¯as. id al-Shar¯ı‘ah perspective. The index incorporates quantitative and qualitative information of the Islamic banks and assigns the ratings accordingly. We also applied the criteria to 5 Islamic banks in Pakistan and computed their maq¯as. id al-Shar¯ı‘ah index using detailed information. The index is used to have a relative evaluation of the Islamic banks regarding their advancement towards achieving the maq¯as. id al-Shar¯ı‘ah. To construct an index, we evaluate the Islamic banking services by the four maqas. id namely h. ifz . al-mal¯ , h. ifz . al-¯ım¯an, h. ifz . al-‘aql, and h. ifz . al-nafs. Using the quantitative and qualitative information, the index shows each bank’s rating. The paper finds that the banks with more prudent practices regarding the financial performance and Shar¯ı‘ah compliance fullfil the maq¯as. id al-Shar¯ı‘ah in a better manner and accordingly get a higher index ranking. The stakeholders of the Islamic banking would prefer to have the industry evaluated as per maq¯as. id al-Shar¯ı‘ah. This study has directly related the Islamic banking services with the objectives of Shar¯ı‘ah and provided a measurable index for the Islamic banking industry. The suggested index can be used mainly by the regulatory bodies. Future studies may focus more on the aspect and level of Shar¯ı‘ah compliance of the products and services offered by various banks with a dual objective to encourage the banks to raise their Shar¯ı‘ah compliance level and rating, and also guide the stakeholders in the selection of the banks.

Sajjad Zaheer, Warda Rasool. (2017) Maq¯as. id al-Shar¯ı‘ah Index for Islamic Banking Institutions, Journal of Islamic Business and Management, Volume 7, Issue 1.
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